“Investing in Innovation: Hi-Green Carbon’s IPO Story”

HI-Green wiki

HI-Green wiki

Hi-Green Carbon Ltd., a venture of the Radhe Group of Energy, specializes in processing waste hydrocarbons to produce valuable products like RCB (Recovered Carbon Black). With 15 years of experience in the field, the company has successfully developed the first prototype with the assistance of its R&D team. Subsequently, they constructed an indigenous 25 TPD process plant, which was later scaled up to 50 TPD. Currently, they have operated one of the world’s largest patented 100 TPD continuous processing plants at Bhilwara, Rajasthan, for the last 7 years.

Business

Hi-Green Carbon specializes in the conversion of waste hydrocarbons into valuable products, with a primary focus on producing Recovered Carbon Black (rCB). The company’s patented technology is a testament to its commitment to innovation and efficiency, as it saves approximately 60 tons of carbon dioxide emissions while yielding an impressive 35 TPD of high-quality Higreen carbon black.

The production process at Hi-Green Carbon is meticulous, beginning with the careful selection of high-quality crumb rubber. This rubber is processed using a multi-stage approach involving high temperatures, mineral and chemical infusion, pelletizing, and packaging. The result is a highly porous carbon structure with superior bonding properties, enriched with valuable minerals commonly found in rubber formulations. This commitment to quality ensures that Hi-Green Carbon’s carbon black consistently meets or exceeds the standards of prime carbon black available in the market.

Furthermore, Hi-Green Carbon’s waste hydrocarbon processing generates valuable byproducts, including fuel oil, steel, and power. The company’s innovative technology utilizes waste process heat to generate electricity, supporting its sodium silicate manufacturing process. This integrated approach optimizes resource utilization, minimizes waste, and contributes to sustainable practices in its operations.

Expansion and Sustainability

In anticipation of robust future demand, Hi-Green Carbon has embarked on a strategic expansion plan. Construction of a second production unit near Dhule in Maharashtra is currently underway and is expected to be completed by mid-2024. Additionally, feasibility surveys are in progress for the construction of four additional units at different locations. This ambitious expansion strategy aims to achieve an impressive production capacity of 50,000 Tons Per Annum (TPA), solidifying Hi-Green Carbon’s position as a global leader in innovative, high-performance rCB production. These new facilities will be equipped with cutting-edge technology to enhance energy efficiency, reduce CO2 emissions, and further bolster sustainability in the manufacturing process.

Global Partnerships

Hi-Green Carbon actively seeks partnerships with reputable international entities to leverage their expertise, market access, and resources. By forging strategic alliances, the company aims to enhance its global presence and strengthen its position in the waste hydrocarbon processing industry. Hi-Green Carbon welcomes opportunities to collaborate with organizations that share its commitment to sustainability and innovation.

In conclusion, Hi-Green Carbon Ltd., a venture of the Radhe Group of Energy, has achieved remarkable milestones in waste hydrocarbon processing. Its state-of-the-art processing plant and patented technology not only produce high-quality carbon black but also significantly reduce carbon dioxide emissions. This commitment aligns with the Radhe Group’s dedication to renewable energy and environmentally friendly solutions.

Radhe Group of Energy

The Radhe Group of Energy is a rapidly expanding enterprise in India’s renewable energy sector. Over the past three decades, the group has made significant strides in developing and implementing innovative technologies in waste management and renewable energy. Beginning with the production of Bio-coal machinery in the late 1990s, the group has diversified into various areas, including coal/biomass-based gasification technology, hot air generators, electrostatic precipitators, heat recovery units, CO2 generation units, waste heat-based power plants, and waste pyrolysis processing plants.

Vertical integration has been a cornerstone of the Radhe Group’s growth strategy. This approach has allowed the group to address energy and environmental challenges while offering technology-based solutions across industries. The group’s commitment to research and development, backed by an in-house R&D center approved by the Government of India (DSIR – Department of Scientific & Industrial Research), has earned it recognition from customers worldwide. The Radhe Group of Energy is known for its dedication to innovation and its contributions to meeting the global demand for sustainable solutions across various sectors.

Issue Details/Capital History

  • The IPO consists of 7,040,000 equity shares, including 5,990,000 fresh equity shares (Rs. 44.93 crores at the upper price band) and an Offer for Sale (OFS) of 1,050,000 shares (Rs. 7.87 crores at the upper price band).
  • The price band for the IPO is set at Rs. 71 to Rs. 75 per share, with a total expected mobilization of Rs. 52.80 crore at the upper price band.
  • The IPO subscription period is from September 21, 2023, to September 25, 2023.
  • The minimum application is for 1,600 shares, with multiples thereof.
  • Post allotment, the shares will be listed on NSE SME Emerge.
  • The IPO represents 28.17% of the post-IPO paid-up capital of the company.
  • The net proceeds from the fresh equity issue will be used for setting up a new manufacturing unit in Maharashtra, working capital, and general corporate purposes.
  • Allocation: Not more than 50% for QIBs, not less than 15% for HNIs, and not less than 35% for retail investors.
  • Beeline Capital Advisors Pvt. Ltd. is the sole lead manager, and Link Intime India Pvt. Ltd. is the registrar of the issue.
  • Beeline Capital Group’s Spread X Securities Pvt. Ltd. is the market maker for the company.
  • The promoters/selling stakeholders have acquired shares at an average cost of Rs. 9.80 and Rs. 10.50 per share.
  • Post-IPO, the company’s paid-up equity capital will increase from Rs. 19 crore to Rs. 24.99 crore, with a market cap of Rs. 187.43 crore at the upper price band.

Financial Performance

  • For the last three fiscal years, Hi-Green Carbon Limited (HGCL) reported the following:
    • FY21: Turnover of Rs. 24.29 crore and a net profit of Rs. 0.10 crore.
    • FY22: Turnover of Rs. 51.14 crore and a net profit of Rs. 3.68 crore.
    • FY23: Turnover of Rs. 79.04 crore and a net profit of Rs. 10.85 crore.
  • The company’s average EPS for the last three fiscal years is Rs. 3.51, and the average RoNW is 34.66%.
  • The IPO is priced at a P/BV of 6.31 based on its NAV of Rs. 11.89 as of March 31, 2023, and at a P/BV of 2.78 based on its post-IPO NAV of Rs. 27.02 per share (at the upper price cap).
  • If FY23 earnings are attributed to the post-IPO fully diluted paid-up equity capital, the asking price is at a P/E of 17.28.

Dividend Policy

  • The company has not declared any dividends for the reported periods in the offer document.

Comparison with Listed Peers

  • According to the offer document, Hi-Green Carbon Limited has no listed peers for comparison.

Merchant Banker’s Track Record

  • Beeline Capital has handled 19 mandates in the last two fiscal years, including the ongoing one.
  • Out of the last 10 listings, one opened at par, and the rest had premiums ranging from 0.39% to 85.71% on the day of listing.

Please note that the information provided here is based on the offer document, and investors should conduct their own due diligence and consider all relevant factors before making investment decisions in the Hi-Green Carbon IPO.